Spring Break
Avoiding a bad credit rating
Communication critical in addressing outstanding debt
Brian Reisinger
Issue date: 3/14/05 Section: Money
It's no secret that college students often are strapped for cash.
But missed credit card payments or trends in financial irresponsibility can establish a bad credit rating - a situation that Harry Hertel, legal services attorney for UW-Eau Claire, said can lead to extended payment plans, difficulty in receiving loans and even bankruptcy.
"Basically, what you want to do is avoid a bad credit rating," he said.
A history of failing to make payments on time, irresponsible use of credit cards and large amounts of debt can all contribute to a bad credit rating, said Jean Baglien, a mortgage consultant for Wells Fargo.
Sophomore Megan Holman said she uses online banking to track her spending.
"I use online banking, and then I can check my account everyday," she said.
But missed credit card payments or trends in financial irresponsibility can establish a bad credit rating - a situation that Harry Hertel, legal services attorney for UW-Eau Claire, said can lead to extended payment plans, difficulty in receiving loans and even bankruptcy.
| What you need to know about credit: - Credit is more than just a plastic card you use to buy things - it is your financial trustworthiness. - Good credit means that your history of payments, employment and salary make you a good candidate for a loan, and creditors - those who lend money or services - will be more willing to work with you. - Having good credit usually translates into lower payments and more ease in borrowing money. - Bad credit usually results from making payments late or borrowing too much money, and it means you might have trouble getting a car loan, a credit card, a place to live and, sometimes, a job. - In most cases, it takes seven years for accurate, negative information to be deleted from a credit report. What do creditors look at? - Bill-paying history - How many accounts you have and what kind - Late payments - Longevity of accounts - The unused portions of lines of credit - Collections actions - Outstanding debt - The Federal Trade Commission |
"Basically, what you want to do is avoid a bad credit rating," he said.
A history of failing to make payments on time, irresponsible use of credit cards and large amounts of debt can all contribute to a bad credit rating, said Jean Baglien, a mortgage consultant for Wells Fargo.
Sophomore Megan Holman said she uses online banking to track her spending.
"I use online banking, and then I can check my account everyday," she said.
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